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Why India Is Ready for a Universal Basic Income

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Why India Is Ready for a Universal Basic Income

How It Could Cut Poverty and Bureaucracy

Foreign Affairs,

5 min read
5 take-aways
Audio & text

What's inside?

In India, 30% of the population lives below the international poverty line. Can a universal basic income be the solution?

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Editorial Rating

8

Qualities

  • Controversial
  • Innovative
  • Applicable

Recommendation

It may not come as a surprise that wealthy countries like Finland, Canada and Switzerland have flirted with a universal basic income, but perhaps you didn’t know that India – where approximately 30% of the population lives below the poverty line – has, too. Economist Shamika Ravi leverages her expertise in development in India to argue that the country should replace its ineffective, corrupt welfare programs with a base income for all its citizens. getAbstract recommends this unexpected but well-reasoned argument to all invested in solutions to poverty in India and beyond.

Summary

India’s welfare system repeatedly fails to help the nation’s poorest citizens. Take, for example, the massive public distribution system, which subsidizes food for poor families: Only 28% of its subsidies ever make it to India’s poorest families. The rest either goes to “nonpoor households” or never reaches any household at all. India could replace such inefficient welfare programs with a universal basic income. According to the Indian Finance Ministry, $4 per person per month could drive poverty rates down from 22% to 7%, and it would only cost the government roughly 2% of gross domestic product.

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About the Author

Shamika Ravi is an economist who specializes in India’s development and a senior fellow at the Brookings Institute.


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